If you have been living under your real estate the past few weeks instead of inside it, there has been a verbal war raging in the REweb over the testing by Realtor.com of a new creation called AgentMatch, ever since Realtor.com (RdC) president Errol Samuelson first announced the “experiment” at the NAR Convention in San Francisco in November.
As sometimes happens in such debates, clear and concise points of logic are overshadowed by ad hominem arguments toward the speaker. Witness what happened to Allison Schwartz, Communications VP at RdC parent corporation Move, Inc. when she engaged the madding crowd in comments following the first webcast of the AgentMatch advisory board meeting in early December. Alison commented on the resignation of board member Jack Attridge (an agent with Massachusetts based William Raveis realty) by questioning whether Mr. Attridge was right for the job in the first place:
“I can’t help but wonder if you weren’t committed to helping shape the product development process from the beginning. Your quitting of the board in such a premature and public manner without discussing your displeasure with us first leads me to conclude that you might not be the best person to help shape the product on behalf of our industry.”
That little jab resulted in a deluge of barbs being thrown at Ms. Schwartz, some deserved, many not, that merely exacerbated the problem and diverted attention from the real issues.
More positions were staked and more opinions followed. Keller Williams, the largest real estate franchise in North America, condemned the effort and advised agents not to participate, then followed later with a revised semi-condemnation.
Ernie Graham, product management leader for AgentMatch, did a podcast with Rob Hahn on the Notorious POD and later a Goggle+ video chat in with Lani Rosales, COO of AGBeat.com. In his resignation letter, Mr. Attridge took Ms. Rosales to task for having “just written an article belittling agents and who had only included AgentMatch’s lead person in a biased article supporting the product.”
What a mess.
Despite the deluge of disassociated complaints included in the comments posted after every new news story on AgentMatch, there were a number of valid points made about the service that would give one pause before moving forward. It is based primarily on listings taken, managed, and sold and measures such basic parameters as list to sale price ratio, days on market, volume of listings, etc. The loudest cry from the Realtors who object was two-fold: (a) numbers alone do not a story tell, and (b) NAR should not be in the business of rating its members or comparing one member to another by any measure or mean.
Enough has been said, and said, and said about the first objection. So much so that barely a month after announcing the project Realtor.com published a letter from President Errol Samuelson stating that the pilot test of AgentMatch was concluded, but that the effort “to create the most accurate and complete resource for consumers looking for a Realtor online, and to continue moving the industry forward with innovative solutions” would continue. The REWeb can now breathe a collective sigh of relief, pat each other on the back for a job well done in bringing down the program, and concentrate on the holiday festivities that will surely fill their calendars for the next few weeks.
While Realtors are pleased that they overcame the first objection (data does not tell the whole story) It’s their second objection that deserves closer scrutiny, because it goes to the core of a larger conversation being had in the halls and on panels at real estate conferences, a conversation that will continue for the next year or longer. Underlying all of this superficial debate over whether ratings are good or bad, whether they should be accompanied by reviews, and how to keep Trulia and Zillow from doing it first (even if everyone agreed it was a bad idea), underlying all of that is the real core issue. Once one dispenses with the myriad of complaints about how it’s done, one is left with the underlying question, “Should it be done?” and if so by whom. What is the role of NAR in all of this? And what should it be?
NAR has tried to avoid this conversation. It rebuffed attempts to link NAR to its AOR-MLSs in the context of The Realty Alliance’s general protestations about MLS behavior. (We at NAR don’t tell the MLSs or the brokers how to do business.) It tried again to dodge the bullet aimed at them because of the actions of the website that shares the Realtor name. (We don’t tell Realtor.com what they can and cannot do with their website.)
I would contend that not only does NAR tell Move what they can and cannot do with the RdC website they bill as the “official website of the National Association of REALTORS” they should either own up to that authority and responsibility or abstain from the conversation and abdicate the throne.
Most commentators presumed that in the wake of this past summer’s history making special meeting of the NAR board of directors in Chicago there was a direct causal relationship and significant oversight by NAR in the development of AgentMatch. Barely a month earlier, NAR CEO Dale Stinton reconfirmed for the zillionth time that Realtor.com is the official consumer website of the NAR and detailed many of the changes that had been made or were about to be made as a result of the loosening of the reins guiding RdC. To quote the Inman News article, “He said NAR’s relationship with Move had vastly improved. ‘We’re in constant communication now,’ he said.” [Emphasis mine.]
Agents were now puzzled to see a new controversial service emerge, one which presumably NAR had communicated constantly about with RdC. A common theme heard throughout was NAR exists to promote all agents, not promote one over another, which is what such ratings systems do. To make that a viable issue, one needs to clearly understand the origins of RdC and to dispel many of the false premises that have been repeated so frequently as to become, if not fact, certainly accepted lore.
A brief history of Realtor.com
Realtor.com was originally created to be an extension of the Realtor brand. It was to be an advertising medium, operated by the Realtor Information Network (RIN, the NAR subsidiary created to run RdC). Originally, it was free. The plan looked good on paper. And it didn’t work.
So in 1996 RIN hired a startup company called RealSelect to operate it. In exchange RealSelect got listings from the MLSs, paid the MLSs for listings, paid NAR for the license to use ‘Realtor’ and sold data feeds to other websites (AOL being the most notorious) and advertising.
That didn’t work either. Real Select reorganized into Homestore, went public. It didn’t work. A bunch of people went to jail. To give you a flavor of the times back then, and a better understanding of how long the war over listing data syndication has been waged, here’s a quote from Brad Inman, then publisher of Inman News, in a November 2004 (yes, ten years ago) article. See if this sounds familiar.
In real estate, MLS data sits at the apex of the change, specifically the MLS information that is pushed to the Internet every minute of the day. In most cases, this data migration ironically is endorsed by the industry, but it also has ignited distrust and deep angst in a business that was congenial for decades.
The industry has made strategic mistakes in the mad scramble to quickly publish the data on the one hand, but at the same time try and control it. The Internet inherently frowns on the idea of control.
The Homestore saga was partly due to a confusing strategy of both keeping control of the data while letting go of the information. Despite an assertive and ethical new management team, the company is still struggling with its past. NAR’s restrictions on the control of the data contributes to the quandary for Homestore.
Homestore became Move in 2006, and now it’s working pretty well, but many of the issues Mr. Inman identified a decade earlier still plague the relationship between Move and NAR.
Let’s get our facts straight before we begin the debate.
NAR owns the trademark on the term REALTOR® and they will (and have) defend it to the death against continuing misuse and inadvertent usage that threatens to devolve the term into common usage like Kleenex® or Plexiglas® despite the preemptory addition of the registered trademark ® after each.
NAR has a subsidiary corporation called RIN (Realtors Information Network), a remnant from an earlier attempt by NAR to run their own national portal. RIN contracts with Move to operate the Realtor portal on behalf of NAR. RIN licenses the right to use the Realtor name in their agreements with Move. For this privilege, Move pays RIN about $2 million each year in license fees.
Move, not NAR, owns the domain name “Realtor.com” as confirmed by Whois.org. To make things even more confusing, Move has created a d.b.a. operating entity name for its RealSelect subsidiary called (coincidently) Realtor.com to actually operate the website. To differentiate the two, I’m going to call the website RdC (for realtor-dot-com) and the company R.corp.
NAR does not own the website (i.e. all the code that runs the website, the servers upon which it sits, or the content created by R.corp). Nor does NAR have a say in product development by R.corp other than the restrictions placed upon Move by the operating agreement. NAR holds one seat on Move’s board of directors, a seat occupied by Cathy Whatley, past NAR president in 2003 and NAR holds less than 2% of its outstanding stock.
So what is the real issue here?
The original mission of RdC – “To connect real estate professionals with consumers in order to increase the number of home sales transactions.” – the one that most Realtors remember and that they hang their argumentative hats on is no longer viable, because there’s competition out there. If you operate a website with your name on it and you want people to come to it so you can reap the free leads from it, you need traffic. RdC is losing the traffic race, slipping to fourth place in the October Experian report with less than half the traffic of Zillow (not counting Yahoo! which Zillow powers).
All this noise about AgentMatch, while there is some validity to the arguments, disguises the underlying problems:
- RdC has a new mission – to make money for Move, Inc – and agents don’t like it.
- NAR has control of the brand and to the extent defined in the operating agreement can tell Move what they cannot do with the brand. But they don’t want to get too close because they don’t want to be blamed for all the stuff Move does that agents don’t like.
- NAR still receives payments from Move, only $2 million per year in related-party transactions, enough to make it interesting.
- NAR does have editorial control over some parts of the content (i.e. no FSBOs unless listed by a broker), and bully pulpit control over others. But they don’t want to use the veto power too often or they’ll be painted with the failure brush again and we’ll be back in Chicago for another board meeting.
- Despite calls from agents to “Take back Realtor.com” NAR can’t fire the operator of the website. According to NAR CEO Dale Stinton at the May 2013 mid-year meetings in DC, “…there ain’t no getting anybody else. It’s an evergreen agreement (with Move) that goes on forever. If you didn’t know that before, you know it now.” So NAR couldn’t pull the website from Move as long as Move is performing to the dictates of the agreement.
And right there is the opportunity.
NAR might like to end the relationship with Move if they could. But it’s kind of nice to have a whipping boy around when you need to divert attention away from other failures. It’s even better when you can disown ownership of the problem or the ability to solve it. NAR may want a national website devoted exclusively to promoting the Realtor brand, but they have proven once before they couldn’t make it competitive. Even their latest efforts with Housevalues.com are nothing short of unremarkable.
But reverse the roles and look at this question from the other side of the table.
It may be time for Move to tell NAR they don’t want to operate RdC anymore.
Why? Because the brand is more of a liability than an asset. It’s closely associated with the trademark and the national association. It comes with restrictions (still) that prevent it from being fully competitive. And it’s not a name Move can advertise to promote the website without promoting the people designated by that mark as well. And therein lays the real problem.
The name means too many things, so many that it really means nothing at all. It’s worse than Kleenex, which everyone recognizes as meaning only one thing – nose blowing, tear absorbing, make-up removing tissues. Realtor means lots of things in many contexts, and not all are clear or good.
One cannot overlook the tacit acceptance of this premise embodied in the latest redesign of the RdC website. Gone is the Big Blue R logo from its prominent position, top-most left-most on the homepage, along with the tag line about being the ‘official site’ of NAR. It’s now “Where Home Happens.” But clearly it’s not where NAR happens, and that’s apparently OK with NAR.
By stepping away from the Realtor.com name entirely, Move would have a chance to show what they can really do with a national website, how they could compete on a level playing field with Z, T, H, and W (‘w’ for whatever is next).
There are plenty of breach provisions in the agreement that would give Move an opportunity to exit, even if NAR didn’t want them to. They could breach for non-payment or for adding content not approved by NAR.
In this case, NAR could benefit as well. They would get back their brand-named website. Some might say they have not proven in the past that they could run a national website. But a couple things have changed for NAR in the past few years, not the least of which was the creation of the Realtors Property Resource (RPR), and with it the elevation of two nationally prominent and industry respected leaders who DO know how to run a website: Dale Ross and Marty Frame. Dale started what would become at the time the largest MLS in the country, MRIS, and Marty was operating national listing portal Cyberhomes.com before the agreement with LPS that created the RPR product and the team to manage it.
Exposing selected portions of the accumulation of property information that is RPR could become the basis for a new and improved RdC. They wouldn’t even need active listings. The content on RPR is unrivaled anywhere and would definitely separate and differentiate RdC from the current portal competition. By making RdC the showcase for REALTORS® rather than just one more website with listing data, NAR could put the sheen back on their brand. NAR could recapture the respect and support that has long been missing from its membership be creating a flagship website that truly offers unique content and value to consumers and at the same time guides buyers and sellers toward Realtors to help in their transaction when the time is right, all without competing advertising, three-headed monsters, or “selling us back our own leads.” And all without dues dollar support if the RPR revenue plans are still intact and on track.
The current operating agreement actually contemplates such a possibility in the terms for termination. In section 7.3 (b) entitled “Transition” It states:
If deemed reasonably necessary by RIN in order to facilitate the Transition, RIN shall have the right to enter the facilities where the personnel and equipment related to the operation of the Domain Site and the RPA Business are located for the purposes of (i) observing such operations, (ii) directing such operations and retaining personnel, if felt to be necessary to the continued operation of the Domain Site and the RPA Business, and (iii) obtaining copies of Data Content Provider Agreement, copies of agreements with advertisers and copies of any and all related records. In addition, Operator shall provide to RIN copies of all source codes and related documentation for the Software without charge. [Emphasis mine]
So MOVE could keep the same website system and simply change the name from Realtor.com to Move.com. All the license agreements with AOR’s and MLSs are with RealSelect (dba Realtor.com, the corporation not the website) and would carry over to successors and assigns, so the data flow wouldn’t be interrupted. If some MLSs objected to that assignment, remember Move owns ListHub, the largest aggregator and syndicator of listing data anywhere. Move could just make themselves a new publisher in the ListHub network.
Then with ALL the shackles off, Move would truly be able to compete head to head with Zillow, Trulia and Homes in a no-holds-barred race for the hearts, minds, and wallets of not just Realtors but all licensed agents, without the need for any more special NAR board approvals.
By making this change, Move would actually be helping NAR and for Realtors as well. Breaking the ties with Move would give NAR a second chance to build the national website that most Realtors thought they were getting 15 years ago – a national showcase for Realtors as a core service of membership with all of their properties displayed in full splendor, unencumbered by any advertising for anyone or anything other than the listing broker and agent. Just think of this Realtopia. No FSBO’s, no Non-Realtor listings, no builder listings, no foreclosures, no REOs, no AVMs, no three-headed monsters – just plain simple Realtor supplied property information on a website that doesn’t try to compete with ZTH because it doesn’t have to. If New RdC chose to display active listings, they would do so knowing behind the listing info is the deep library of proprietary RPR information that is available ONLY to Realtors and only through them to their clients. NAR would follow the advice of the WOPR – the only winning move in this traffic war may be not to play.
There are enough benefits on both sides of this equation to make this divorce a no-contest event. NAR can’t be having fun trying to decide where to focus their attention or make their next defensive stand. After the divorce, they can say with a clear conscience that they don’t have a dog in the AgentMatch fight, or any fight involving the new Move.com. And they would finally be right.
Now, how about a nice game of chess?
For this post:
Cause: The latest uproar over agent ratings
Effect: A solution for the syndication arms race